THESE CEOS STILL GET MILLIONS IN PERKS
19 corporate leaders receive $1M or more in ‘other’ benefits
Big perk packages largely fell out of favor around 2011 when new regulation shined a bright light on everything companies were paying executives.
Big paychecks and options grants are two ways that CEOs score. But there also are perks — worth millions in some cases — that continue to be paid despite greater scrutiny over such windfalls.
There are 19 current CEOs, including Omar Ishrak of medical device company Medtronic, Dion Weisler of HP and Mark Zuckerberg of Facebook, who were awarded “other compensation” — or perks as they’re commonly called — valued at $1 million or more in the most recent fiscal year, according to a USA TODAY analysis of data from S&P Global Market Intelligence.
“We rarely see perks over $1 million,” says Dan Marcec, director of content at executive pay tracker Equilar. “When you do, you can venture to say they are unusual.”
Perks such as the personal use of the corporate jet or membership dues to country clubs continue to be a controversial way to pay CEOs. Perks have been flat for several years as investors pay closer attention to them. Big perk packages largely fell out of favor around 2011 when new regulation shined a bright light on everything companies were paying executives, says Robert Newbury, director on executive compensation at Willis Towers Watson. Suddenly, additional disclosures prompted many companies to cut these payments, Marcec says. From 2011 through 2012, the number of Fortune 100 CEOs that got aircraft perks, for instance, fell 3.9 percentage points to 38.9%, Marcec says.
Pricey perks are still around but are mostly ones companies think are defensible, Marcec says. The biggest total perk award, val- ued at nearly $26 million, went to Medtronic’s Ishrak. The value of his perks amounts to 65% of the total $39.5 million he was paid in fiscal 2015.
Nearly all those perks were associated with the company repaying a tax Ishrak was hit with following the company’s corporate inversion, which moved its headquarters to Ireland. When Medtronic bought Ireland’s Covidien, that triggered a capital gains tax that all investors including Ishrak had to pay. It also triggered an excise tax from the federal government, which serves as a sort of penalty for such moves. The company repaid that excise tax back to Ishrak as well as others.
Payments to help CEOs pay big tax liabilities continue to be sources of big perks. HP’s Dion Weisler pulled in perks of $12.1 million — coming from several key benefits. Weisler got $9.1 million to cover additional taxes resulting from the fact Weisler moved to the U.S. But there were other perks connected to his move. Weisler, who used to live in Singapore, was paid $2.4 million to pay for his permanent relocation to Palo Alto, Calif., where the company is based.
Facebook’s Zuckerberg is paid $1 in salary and has been given no stock grants for years as CEO. But he received $5 million in perks — of which $4.3 million is connected with costs of personal security at his home and during personal travel. Keeping Zuckerberg protected costs nearly three times more than the $1.6 million Amazon has paid to secure CEO Jeff Bezos.
While companies are cutting back in perks overall, there are still big ones companies think are worth the price — and scrutiny.
“Companies’ evaluation determines if (perks) satisfy a business need,” Newbury says. “If companies can justify them, they leave them in.”